Is Buffett Right? Brand Values and Long-run Stock Returns

49 Pages Posted: 8 Jul 2022

Date Written: June 26, 2022


An equal-weighted portfolio of Best Brands (BBs) in the U.S. earns an excess return of 25 to 35 bps per month during the period 2000-2020. This result is remarkably robust across various factor models and therefore is not driven by exposure to common (risk) factors. The excess returns of the BB portfolio are not due to firm characteristics, industry composition, or small-cap stocks. We provide evidence suggesting that expensing investments in brands (instead of capitalizing them) and the tendency to underestimate the effect of brand name on generating future earnings are two mechanisms contributing to the excess returns.

Keywords: Brand value, intangible assets, excess returns, undervaluation

JEL Classification: G01, G11, G14

Suggested Citation

Boustanifar, Hamid and Kang, Young Dae, Is Buffett Right? Brand Values and Long-run Stock Returns (June 26, 2022). Available at SSRN: or

Hamid Boustanifar (Contact Author)

EDHEC Business School ( email )

393 Promenade des Anglais – BP 3116
Nice, 06202

Young Dae Kang

The Bank of Korea ( email )

Korea, Republic of (South Korea)

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